CANBERRA, Australia -- An Australian state plans to introduce recycled sewage to its drinking water as a record drought threatens water supplies around the nation, a state leader said Monday.

Queensland state Premier Peter Beattie said falling dam levels have left his government with no choice but to introduce recycled water next year in the state's southeast -- one of Australia's fastest growing urban areas.

"We're not getting rain; we've got no choice," Beattie, who said his government had scrapped a referendum planned for March on the issue, told Australian Broadcasting Corp. radio.

Australian farms and most cities are in the grip of the nation's worst drought in a century, with some areas receiving below average rainfall for a decade.

"I think in the end, because of the drought, all of Australia are going to end up drinking recycled, purified water," he added.

However, Morris Iemma, Premier of New South Wales, the most populous of Australia's six states, said drinking recycled water was not inevitable for Australia's major cities including his state capital, Sydney.

South Australia state Premier Mike Rann said his state -- Australia's driest -- already used recycled water to irrigate crops but would not introduce it to the drinking water supply.

Victoria, the second most populous state, did not need to recycle drinking water, the state's acting Water Minister Justin Madden. He said using recycled water for industry was a better option since that would free up more drinking water.

Prime Minister John Howard, a Sydney resident, congratulated Beattie and predicted recycled water would be introduced to Sydney in the near future.

"I am very strongly in favor of recycling, and Mr. Beattie is right and I agree with him completely," Howard told Southern Cross Broadcasting radio in Sydney.